UK manufacturing PMI hits 11-month low in Dec ’24 – PMI

The UK’s manufacturing sector faced mounting challenges in December 2024, as the S&P Global UK Manufacturing Purchasing Managers’ Index (PMI) fell to an 11-month low of 47.0, down from 48.0 in November.

This marks the third consecutive month of contraction, with the index remaining below the neutral 50.0 threshold.

A sharp decline in output, new orders, and employment signaled worsening conditions across the sector, particularly among small and medium-sized enterprises (SMEs).

Looking ahead, the outlook remains bleak. Business confidence has plunged to a two-year low, driven by inflationary pressures, higher labour costs, and subdued market sentiment.

Manufacturers are restructuring operations in response to anticipated increases in National Insurance and minimum wage levels in 2025.

Export sales also fell sharply, reflecting weaker demand from Europe, Asia, and the US. Rising costs for transportation, raw materials, and labour further strained operations, prompting firms to cut staff and reduce inventory levels.

Economists warn that ongoing supply chain disruptions and inflationary pressures could deepen the downturn, with the Bank of England likely to tread cautiously on interest rate policy despite the sector’s struggles.

Attribution: Amwal Al Ghad English

Subediting: Y.Yasser